Re: Upgrade confusion.
Which version of BuddyPress are you running? Where did you find those instructions?
I don’t think BP has been installed in /mu-plugins/, and has been referenced that way in the readme.txt file, for over four months. I just looked back at 1.0.1, 1.0.2, and 1.0.3 and all three of those versions have in their readme.txt file what I excerpted above.
Always read the readme.txt file that comes with the installation package.
Here’s the readme.txt file from v1.0.1: https://trac.buddypress.org/browser/trunk/readme.txt?rev=1621
Here’s the one from v1.0.3: https://trac.buddypress.org/browser/tags/1.0.3/readme.txt?rev=1614